The Ministry of Commerce has introduced a 15% tariff on coal and liquefied natural gas (LNG), while a 10% tariff will apply to crude oil, agricultural machinery, and large-displacement vehicles. Concurrently, Donald Trump has paused tariffs on Canada and Mexico after negotiations but has not lifted the 10% blanket tariff on all imports from China, effective immediately. This move affects even previously exempt purchases under $800, which will notably impact online shoppers relying on direct shipments from China.
Following these announcements, the Australian share market experienced a significant decline, and the Australian dollar fell below 62 US cents. Meanwhile, reports indicate China’s State Administration for Market Regulation is investigating Google for potential anti-competitive behaviour. A spokesperson for China’s Foreign Ministry commented that there are no winners in a trade war, urging the US to approach its internal issues more rationally rather than imposing arbitrary tariffs.
The new tariffs could adversely affect US imports heavily reliant on China, with notable figures from 2022 showing significant trade volumes. Conversely, this scenario may create opportunities for Australian exporters, who have seen China as a key market for commodities such as crude oil and LNG, as well as coal.